The Fed's Balance Sheet Jumped $300B Last Week. Is That Inflationary?
The Breakdown
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Bank Term Funding Program - Will It Be Enough?
The bank term funding program provides liquidity for mortgage-backed securities as well as treasuries up to 100% of the market value of those bonds. First Republic is underwater through these liquidity programs, both at the Federal Reserve and at JP Morgan. They're not making money on that liquidity. It is really a form of emergency liquidity to get them through this bank run. We don't know the terms of that. The funding cost that JP Morgan will charge will be higher than the 2% plus that First Republic is earning on those mortgages.
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Transcript
